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Jones v. Eagle Ii





APPEAL from the Circuit Court of Cook County; the Hon. RICHARD L. CURRY, Judge, presiding.


This is an appeal from the dismissal of all five counts of plaintiff's class action seeking specific performance, reformation of contracts, injunctive relief, and damages arising from the sale of condominiums following the conversion of Carl Sandburg Village No. 7 (hereafter No. 7) from rental to condominium units. The question presented is whether a cause of action was stated in any of the counts which sounded respectively in a violation of the Chicago Condominium Ordinance (Municipal Code of Chicago 1979, ch. 100.2 (the Ordinance)), in fraud, in a breach of fiduciary obligations, in breach of contract, and in violations of the Consumer Fraud and Deceptive Business Practices Act (Ill. Rev. Stat. 1979, ch. 121 1/2, par. 261 et seq.). *fn1

It appears that plaintiff was a tenant of a one-bedroom apartment in No. 7 who, in March 1979, received along with other tenants a notification by defendants that No. 7 was to be converted into condominiums and that, on April 19, 1979, defendants filed a property report, a copy of which was received by plaintiff on May 21, 1979. Such a notification and a property report were required by the Ordinance. The property report, which contained a narrative describing the conversion and summarizing the features of No. 7, also included various exhibits — one of which was entitled "Initial Price List" and stated a "Resident Price," an "Introductory Public Price," and a "Public Price" for each unit. In March 1980, an amendment to the property report containing increases in the resident prices of apartments (including that of plaintiff) and on April 18, 1980, a second amendment were filed showing a decrease in the prices, but they were still higher than those in the Initial Price List. The units in No. 7, however, were not made available for sale until April 20, 1980.

Plaintiff's complaint in all five counts sought a mandatory injunction requiring that defendants offer the apartments for sale at the prices stated in the Initial Price List and a reformation of the contracts for sale already entered into to reflect those prices. The complaint also asserted generally that when the property report was filed on April 19, 1979, defendants did not intend to offer the units in No. 7 for sale until at least one year later; that the units in No. 7 were first made available for sale to residents and tenants on April 20, 1980, at prices substantially higher than those quoted in the original property report; that between April 19, 1979, and April 20, 1980, defendants refused to sell any unit in No. 7 to tenants or residents; and that during that period various tenants of No. 7 renewed their leases.

In count I, it was additionally alleged that defendants violated the Ordinance by knowingly filing a property report containing false and misleading disclosures of the prices at which tenants could purchase the units in No. 7, by failing to disclose that the initial prices were subject to change and that the units would not be available to any prospective purchaser at such prices and by knowingly representing said prices as "current" when they were not. The allegations of count I are expressly incorporated by reference into each of the other four counts.

In count II, it was also stated that defendants fraudulently represented to the tenants of No. 7 that they would be able to purchase their units at the prices initially listed; that these representations were made to induce the tenants to renew their leases and to continue paying rent until defendants actually made the units available for sale; and that defendants knew that numerous other persons would, in reliance upon the original property report, take assignments of existing leases and tenancies to avail themselves of the opportunity to purchase units at the initially quoted prices.

In count III, it was alleged that by virtue of their position as developer, "defendants were and are in a fiduciary relationship with the Tenants of No. 7 and therefore owe them duties and obligations of trust, loyalty, and faithfulness" which they breached by making material misrepresentations, failing to disclose material facts, and violating the Ordinance.

Other allegations of count IV stated, in relevant part, that the offer to sell the units in No. 7 to tenants at the prices set forth in the Initial Price List was irrevocable, and that defendants' failure to make these units available to the tenants at such prices was a breach of contract.

In count V, it was also asserted that the misrepresentations, omissions, actions, and course of conduct described in the other counts were violations of the Consumer Fraud and Deceptive Business Practices Act. Ill. Rev. Stat. 1979, ch. 121 1/2, par. 261 et seq.

Defendants moved to dismiss, asserting in substance that no cause of action was stated in any of the five counts. Briefs were presented by both parties, and after a hearing the motion was sustained and this appeal followed.


Plaintiff contends that each of the five counts stated a cause of action and was improperly dismissed. We will consider them separately in the light of the applicable law that in determining the propriety of a dismissal of an action, we are to be concerned only with questions of law presented by the pleadings (Fancil v. Q.S.E. Foods, Inc. (1975), 60 Ill.2d 552, 328 N.E.2d 538); that all facts well pleaded as well as reasonable inferences which can be drawn from those facts should be accepted as true (Browder v. Hanley Dawson Cadillac Co. (1978), 62 Ill. App.3d 623, 379 N.E.2d 1206); that a complaint should not be dismissed for failure to state a cause of action unless it clearly appears that no set of facts could be proved under the pleadings which should entitle plaintiff to relief (Courtney v. Board of Education (1972), 6 Ill. App.3d 424, 286 N.E.2d 25); and that to withstand a motion to dismiss, the complaint must minimumly allege facts sufficiently setting forth the essential elements of the cause of action (Woodill v. Parke Davis & Co. (1978), 58 Ill. App.3d 349, 374 N.E.2d 683, aff'd (1980), 79 Ill.2d 26, 402 N.E.2d 194).

We turn then to the question as to whether a cause of action is stated in count I, which is predicated upon a violation of section 100.2-3 of the Ordinance (Municipal Code of Chicago 1979, ch. 100.2, § 100.2-3), providing that:

"No person shall with the intent that a prospective purchaser rely on such act or omission, advertise, sell or offer for sale any condominium unit by (a) employing any statement or pictorial representation which is false or (b) omitting any material statement or pictorial representation." (Emphasis added.)

The applicability of this provision depends on whether, as plaintiff contends, the property report filed by defendants was an "offer for sale" as that term is used therein, or whether, as defendant argues, it was a disclosure under the Ordinance ...

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